European markets sank Wednesday, tracking a US and Asian sell-off as the Trump-fuelled surge stumbled on doubts over his ability to fire up the world's biggest economy.
The dollar also struggled to recover losses against its major rivals as the euphoria of the US post-election period faded.
After hitting multiple records this month, Wall Street's main indices on Tuesday had suffered their worst losses since Donald Trump's November election triumph dragging Europe and Asia down with them as dealers fretted about his agenda.
London stocks shed 0.8 percent in mid-afternoon trade, with top faller Kingfisher (Frankfurt: 812861 - news) slumping 5.7 percent as the home-improvements chain's annual results missed market expectations.
In the eurozone, Paris dropped 0.3 percent and Frankfurt lost 0.4 percent.
The key cause for investors' concern is Thursday's vote in Congress on the replacement for Obamacare, with many Republicans opposed to it in its current form.
"After four plus months of promises and two months in office, investors are worried that the Trump rally has gone too far on promises alone, now desiring some proof," said Mike van Dulken, analyst at Accendo Markets.
"Financial markets have moved into risk averse mode as traders appear to lose faith in Donald Trump's ability to deliver on his ambitious election pledges," agreed Craig Erlam of Oanda.
"The difficulties facing Trump over the healthcare bill, something that should have been relatively straightforward for him to get support on given the Republicans staunch opposition to Obamacare, is casting serious doubt over his other policies," the expert said.
"A failure to get this through could jeopardise his plans for tax cuts and large infrastructure projects, the very things that investors have strongly bought into since the election."
The president travelled up Pennsylvania Avenue Tuesday to warn the party it could lose its majority if it fails to push through his bill.
If the Trump administration fails to secure support for his bill, analysts say that health reform would likely not take place until October, meaning economic reforms could be delayed until the end of this year at the earliest.
- What next? -
"The key question now is what will happen next," said Fawad Razaqzada, analyst at Forex.com.
"The sell-off could easily last several days and this may well turn out to be a long-term top for the markets. Or it could just be a pause before we see another rally into new all-time highs. The truth is, no one knows what's next for the markets. But the early signs are not great. In fact, far from it."
In London, the banking sector bore heavy losses with Barclays (LSE: BARC.L - news) down 3.1 percent, Standard Chartered (BSE: 580001.BO - news) shedding 2.9 percent and Royal Bank of Scotland (LSE: RBS.L - news) losing 2.1 percent.
The European slip mirrored similar losses in Asia, where Tokyo ended more than two percent lower, while Hong Kong shed 1.1 percent and Shanghai closed down 0.5 percent.
In commodities, oil prices dived close to a four-month low on growing concerns over rising crude stockpiles in top consumer the United States.
Europe's benchmark North Sea Brent crude for May delivery hit $50.05 per barrel, its lowest value since late November.
- Key figures around 1335 GMT -
New York - Dow: DOWN 0.1 percent at 20,646.10 points
London - FTSE 100: DOWN 0.8 percent at 7,321.54
Frankfurt - DAX 30: DOWN 0.4 percent at 11,916.29
Paris - CAC 40: DOWN 0.3 percent at 4,988.23
EURO STOXX 50: DOWN 0.3 percent at 3,420.22
Tokyo - Nikkei 225: DOWN 2.1 percent at 19,041.4 (close)
Hong Kong - Hang Seng: DOWN 1.1 percent at 24,320.4 (close)
Shanghai - Composite: DOWN 0.5 percent at 3,245.2 (close)
Euro/dollar: UP at $1.0798 from $1.0789
Pound/dollar: DOWN at $1.2438 from $1.2467
Dollar/yen: DOWN at 111.10 yen from 111.25 yen
Oil - West Texas Intermediate: DOWN 56 cents at $47.68 per barrel
Oil - Brent North Sea: DOWN 72 cents at $50.24